Susan, Your response is sort of vague "the clearing function is more of a guarantee of our "pipes" to the exchanges..." In your own opinion what are some disadvantages of going with self-clearing firms? Futures contracts are highly leveraged instruments. Wouldn't low margin rates (e.g. margin rates of $500) indicate some false since of security with the firm? With such low margins, active traders could conceivably take on more risk by trading more contracts. How would self-clearing firms combat a problem of traders taking on more risk with multiple contracts and/or what are their unique procedures to resolve an issue similar to this. Thanks a million!
Our margins can be found: http://www.velocityfutures.com/margins_on_futures.html and our commissions can be found: http://www.velocityfutures.com/commisions_schedule.html Velocity offers low margins and low commissions because that is what most customers demand when trading electronic products. We offer these rates with low risk to the firm because we overstaff our risk desk to avoid problems with high risk customers trading past their margin. It is an additional cost to watch all customers tick by tick, but it is also nice to be able to trade futures and only keep small amounts of cash in the firm so that you can have your cash in your equity account where it is needed for margin. Since alot of traders trade only news on the futures, this makes sense for them, that is why we did it. If you can think of anything else that would assist you with trading, we would love to hear about it. Thanks, Jay
Jay, The commiss. and the margin req. look good at Velocity, but the $500 platform fee kills it for the low-volume trader. If you didn't have a platform fee, I would definitely try Velocity Futures. -FastTrader
As long as the firm has competitive commissions, "self-clearing" should not be a deciding factor in choosing a firm. More importantly, you should be asking...where are the servers????? Both FFastTrade and Velocity have their servers in-house, as opposed to an IB like Global Futures, Advanced Futures or Lions futures who are simply acting as intermediaries between the clearing firm and the customer and earning a commission on accounts they introduce.
IF velocity futures goes out of business( in life anything is possible) what happens to customers money??????
http://www.dormantrading.com uses crossfire and offers great commissions, firm clears locals at cbot/cme and establisted since the 1970's.
The day trading margin for the ES is $500.00 at Velocity. It actually is different firm to firm, because the FCM can set it. Also, to address the other question about a firm going out of business. Velocity Futures, L.P. is a registered United States Futures Commission Merchant ("FCM") with the Commodity Futures Trading Commission ("CFTC") and is also a member of the National Futures Association ("NFA"). Velocity Futures is also a member of the Chicago Mercantile Exchange ("CME"). Due to the strict daily financial reporting requirements, substantial net capital requirements to hold customer funds on deposit, and the vigorous audits performed by the NFA, your funds on deposit with a United States FCM are well protected. Jay